/raid1/www/Hosts/bankrupt/TCRLA

/raid1/www/Hosts/bankrupt/TCRLA_Public/021017.mbx T R O U B L E D C O M P A N Y R E P O R T E R L A T I N A M E R I C A Thursday, October 17, 2002, Vol. 3, Issue 206 Headlines A R G E N T I N A BLADEX: 3Q Overshadowed by YTD Loss; Plans Recapitalization IMAGEN SATELITAL: Claxson Increases Terms, Amends Exchange Offer * World Bank Extends Argentina Three-Year Grace Period B E R M U D A TYCO INTERNATIONAL: Auditor Not Included In Criminal Suit B R A Z I L BANCO ITAU: Merrill Cuts Recommendation On Election Concerns CSN: Doubts Mount Over Corus Merger ELETROPAULO METROPOLITANA: BNDES Delays $85M Payment ELETROPAULO METROPOLITANA: Telesp Loses Appeal FIAT: Fidis Finance Division To Be Sold Soon C H I L E ENERSIS: Hiring Advisor To Plan Sales MADECO: Equity Issue Fails, Outlook Worsens C O L O M B I A CMS ENERGY: Sells Colombian Drilling Rights To Cepsa M E X I C O AEROMEXICO: Hospital Consortium Confirms Purchase Interest T R I N I D A D & T O B A G O BWIA: Restructuring Proposal Presented to Staff U R U G U A Y GALICIA URUGUAY: Restarting Operations After Intervention - - - - - - - - - - ================= A R G E N T I N A ================= BLADEX: 3Q Overshadowed by YTD Loss; Plans Recapitalization ----------------------------------------------------------- Banco Latinoamericano de Exportaciones, S.A. (NYSE: BLX) ("BLADEX" or the "Bank"), a specialized multinational bank established to finance trade in the Latin American and Caribbean region, reported Tuesday results for the third quarter ended September 30, 2002. The Bank reported net income for the third quarter of 2002 of $15.8 million, or $0.90 per share, compared with net income of $18.9 million, or $1.05 per share, reported in the third quarter of 2001. Net loss for the first nine months of 2002 was $283.8 million, compared with net income of $79.2 million reported for the same period of 2001. Losses per common share were $16.41 for the first nine months of 2002, compared with earnings per common share after preferred dividends of $4.27 during the same period in 2001. Commenting on the latest quarterly results, Jose Castaneda, chief executive officer of BLADEX, said, "In an operating environment that was even more difficult than we had anticipated three months ago, we are pleased to report that we have accomplished our stated objective of returning BLADEX to profitability. Our net income of $15.8 million exceeded the forecast made at the end of the second quarter. While this result was 16% below the levels reported for the same quarter last year, it is notable that our results in the latest quarter, which included some one-time items, were achieved with a balance sheet 46% smaller than last year. The 21% return on equity achieved during the quarter is also worth noting. "Our profitability, re-capitalization plan and asset quality, with the exception of the largely unchanged impaired portfolio in Argentina, are all moving in the right direction. We are concerned, however, about the increasingly scarce availability of inter-bank lending to the region. The dramatic increase in the risk perception of Latin America in recent months has cut available credit lines to the region by as much as 50% according to some sources and, most worrying, the trend continues unabated. Banks in both the US and Europe, the traditional sources of credit facilities in Latin America are being impacted by two significant forces: first, many of these institutions are facing credit, trading, and/or profitability difficulties in their home markets, which are forcing them to focus their resources on the defense of their core franchises; second, under these circumstances, banks have turned particularly risk adverse. Latin America is, at the moment, being perceived as an uncertain market, with the result that credit facilities are being cut across the board. "This environment is forcing BLADEX to reduce its balance sheet to levels below what technical considerations alone would have dictated. Profitability, however, has been maintained because increased lending margins and cost reductions have compensated for some of the reduction in loan volume. Still, BLADEX is today a smaller institution operating in a smaller market. This situation is not likely to change materially until BLADEX completes its re- capitalization and the uncertainties prevailing in the international markets and in Latin America abate. "It is important for investors and shareholders to realize that, while BLADEX is currently smaller than it has been in recent years, our relative strength and the opportunities to do good trade finance business are greater than at any recent time. As many of our competitors have exited the region, BLADEX's share of this smaller market has increased substantially. Most importantly, we have retained our clients, kept our highly efficient processing capacity intact, and are working to have new products ready to bring to the market once growth resumes. When circumstances change, as they inevitably will, we believe BLADEX will be positioned to resume its growth rapidly and ahead of its competitors. "Regarding the all-important management of our liquidity position, at the end of the quarter, our cash balances of $487 million represented 86% of deposits. Importantly, the cumulative maturity gap for the next six months is positive. The Bank's orderly reduction of its balance sheet by approximately $2.6 billion in the last nine months reflects the matched nature of its asset and liability structure, as well as the high quality and liquid nature of its loan portfolio outside Argentina. "Our efforts to mitigate risk have been successful as evidenced by the improvement in credit reserves and impairment loss coverage ratios. In Argentina, reserve coverage is now 51.6% and our credit balances, net of reserves and impairment losses, declined to $462 million. Since the end of the third quarter, our exposure in the country has been reduced by an additional $22 million. Furthermore, we are encouraged by our ability to strengthen the support behind some of our larger exposures in that country. In the rest of our portfolio, our credit reserve coverage was 3.2% at the end of the quarter, compared to 2.6% at June 30, 2002. "Regarding the next quarter, all other things being equal, we would again be looking for a target of $10 million in operating profits. We currently foresee no need for additional provisions, but remain concerned about volatility in the value of our investment portfolio in Argentina, as well as by the volatility inherent in our interest income flow from the country. "BLADEX is proceeding with its plan to raise at least $100 million in additional tier one capital within the next several months and has made substantial progress with a Core Group of Class A and B shareholders, as well as with multi-lateral organizations, some of which have already approved commitments to provide equity capital. While BLADEX hopes to obtain commitments from the rest of the Core Group during the fourth quarter, there is no assurance that it will be able to do so, or that needed equity capital ultimately will be raised. Prior to any sale of shares to the Core Group, BLADEX will offer the same shares to its existing shareholders in a pro-rata Rights Offering. This will satisfy the pre-emptive rights held by Class A and B shareholders, and will provide pre-emptive rights to Class E shareholders even though they do not have them under BLADEX's Articles of Incorporation. Although a final decision regarding pricing has not yet been made, BLADEX currently expects that it will be necessary to offer shares in the Rights Offering and later to the Core Group, at a price equal to or near the market price of the Class E shares at the end of the Rights Offering subscription period. At the current market price of the Class E shares, this would result in a substantial reduction in BLADEX's per share book value, and shareholders wishing to avoid considerable per share book value dilution would need to subscribe for shares in the Rights Offering. In order to have sufficient authorized but unissued shares to raise the needed equity capital, BLADEX is seeking shareholder approval to increase its authorized common shares from70 million to 185 million. A proposed amendment to BLADEX's Articles of Incorporation making this change will be voted on by shareholders at a special meeting called for November 18, 2002. A proxy statement regarding that meeting is expected to be mailed to shareholders on October 18, 2002. "It is reasonable to ask why BLADEX has chosen to re-capitalize now, when its share price has deteriorated to levels not seen in the past. First, it is imperative to understand that the Bank needs to raise additional capital in order to preserve its unique business franchise and to resume growth once conditions in the market improve. Second, additional capital and the explicit support from shareholders will not only strengthen our balance sheet, but will also enhance our capacity to access funding from depositors, creditors and the debt markets. Third, given the volatility in our business environment, BLADEX's Board and management are of the belief that the Bank must operate with a Tier 1 capital ratio of at least 15% (vs. 12% currently) and that it is neither prudent nor convenient from a business perspective to wait to achieve this ratio through retained earnings. Lastly, while there is no assurance that the new capital will guarantee the preservation of our investment grade rating, the rating agencies have made it clear that, without it, we would be downgraded. In the current environment, the loss of our investment grade rating would impair our ability to obtain new funding." "It is also reasonable to ask why the Bank is seeking additional Tier 1 capital. Tier 1 (common stock equity) is the strongest form of capital and is what our creditors and rating agencies expect. Because of the region's history of volatility, both our creditors and rating agencies assume, expect and require high levels of such equity capital," Mr. Castaneda concluded. SUMMARY ANALYSIS OF OPERATING RESULTS The following table sets forth the condensed income statements for the third quarter and first nine months of 2001, as well as for the second and third quarters, and first nine months of 2002: (In $ millions) 9M01 9M02 IIIQ01 IIQ02 IIIQ02 Operating net interest income 49.2 43.1 17.0 15.0 11.3 Effect of interest rate gap 12.3 6.9 3.6 1.6 0.9 Interest incomeon available capital funds 29.3 11.6 8.0 3.9 3.9 Net interest Income (1) 90.8 61.6 28.6 20.5 16.1 Net commission and other income 15.5 5.8 5.0 2.0 1.1 Gain on extinguishment of debt 0.0 1.4 0.0 0.0 1.4 Derivatives and hedging activities (2) 1.9 0.0 -3.7 -4.3 4.6 Net revenues 108.1 68.9 29.9 18.2 23.2 Operating expenses (3) -18.5 -16.2 -7.0 -5.8 -5.1 Net income before loss on disposal of business segment, reversal of unpaid interest accrued on non-accruing loans and adjustments, provision for credit losses and impairment loss on securities, provision for income tax, and cumulative effect of accounting change 89.6 52.7 22.9 12.4 18.1 Loss on disposal of business segment- BLADEX Securities, LLC (4) 0.0 -1.5 0.0 -1.5 0.0 Reversals of unpaid Interest accrued on non-accruing loans and adjustments (5) 0.0 -10.8 0.0 -9.1 0.0 Provision for possible credit losses, and impairment loss on securities -11.5 -324.2 -4.0 -302.0 -2.3 Provision for income tax -0.0 -0.0 -0.0 -0.0 -0.0 Cumulative effect of accounting change 1.1 0.0 0.0 0.0 0.0 Net income 79.2 -283.8 18.9 -300.1 15.8 (1) Excludes $0.2 million and $9.1 million reversals of interest accrued on Argentine loans placed on non-accrual status in IQ02 and IIQ02, respectively. (2) Represents the impact of the fair value adjustment of credit put options which were exercised in IIIQ02 and the fair value of interest rate swaps (SFAS 133). (3) Includes $0.9 million of severance costs at BLADEX's head office in the first half of 2002. (4) Represents $1.5 million in severance costs related to the closing of the structured finance unit in New York. (5) Includes reversals of interest accrued on Argentine loans placed on non-accrual status of $9.3 million in the first six months of 2002. BLADEX, with $3.3 billion in assets, is a specialized multinational bank established to finance trade in the Latin American and Caribbean region. Its shareholders include central banks from 23 countries in the region and 147 commercial banks (from the region, as well as international banks) and private investors. Its mission is to channel funds for the development of Latin America and the Caribbean, and to provide integrated solutions for the promotion of the region's exports. BLADEX is listed on the New York Stock Exchange. Further investor information can be found at http://www.blx.com BLADEX, Head Office, Calle 50 y Aquilino de la Guardia, Panama City, Panama, Attention: Carlos Yap, Senior VP, Finance & Performance Mgt Tel. No. (507) 210-8581, E-mail: cyap@blx.com -or- The Galvin Partnership 67 Mason Street, Greenwich , CT 06830 Attention: William W. Galvin Tel. No. (203) 618-9800, Email: wwg@galvinpartners.com IMAGEN SATELITAL: Claxson Increases Terms, Amends Exchange Offer ---------------------------------------------------------------- Claxson Interactive Group Inc. ("Claxson" or the "Company") announced the extension and the amendment of its pending exchange offer and consent solicitation (the "Exchange Offer") for all U.S. $80 million outstanding principal amount of the 11% Senior Notes due 2005 (144A Global CUSIP No. 44545HHA0 and Reg S Global ISIN No. USP52800AA04) (the "Old Notes") of its subsidiary, Imagen Satelital S.A. ("Imagen"). Claxson is now offering U.S. $555 in principal amount of its Senior Notes due 2010 (the "New Notes") in exchange for each U.S. $1,000 principal amount of Old Notes. The Company has also increased the consent payment to U.S. $30.00 per U.S. $1,000 principal amount of Old Notes payable to all holders who tender their Old Notes on or prior to the new expiration date. The Supplement to the Offering Memorandum dated October 15, 2002, relating to the Exchange Offer contains a full description of the amendments to the terms of the Exchange Offer. Any holder who has previously tendered their Old Notes will automatically be eligible to receive all of the new and improved terms of the Exchange Offer. The new terms of the Exchange Offer are the final result of active negotiations with holders over the past couple of months. The Company is pleased to report that it has reached an agreement on the economic terms with a group of non-tendering holders who represent approximately 80% of the outstanding principal amount of the Old Notes. Accordingly the Company has increased the minimum participation to 93% from 66-2/3%. Based on the agreement reached with these holders, and including the 16% that had previously been tendered, the Company expects to reach the new minimum participation. The expiration date for the Exchange Offer has been extended from 5:00 p.m. New York City time on October 11, 2002 to 5:00 p.m. New York City time on October 28, 2002. As of 5:00 p.m. New York City time on October 11, 2002, Claxson received tenders from holders of approximately U.S. $12.8 million in aggregate principal amount of the Old Notes. Informational documents relating to the Exchange Offer will only be distributed to eligible investors who complete and return an eligibility letter. If you would like to receive this eligibility letter, please contact Tom Long at D.F. King & Co., the Information Agent for the Exchange Offer, at +(1) 212-493- 6920, or Eduardo Rodriguez Sapey at Banco Rio de la Plata, the Trustee and Rep. Exchange Agent in Buenos Aires, Argentina at +(54) 11-4341-1013. The New Notes will not be registered under the U.S. Securities Act of 1933, as amended, and will only be offered in the United States to qualified institutional buyers and accredited investors in private transactions and to persons outside the United States in off-shore transactions. The New Notes may be listed on the Buenos Aires Stock Exchange. This press release shall not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of, the new notes in any state of the United States in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state. Claxson (Nasdaq: XSON) is a multimedia company providing branded entertainment content targeted to Spanish and Portuguese speakers around the world. Claxson has a portfolio of popular entertainment brands that are distributed over multiple platforms through Claxson's assets in pay television, broadcast television, radio and the Internet. Claxson was formed in a merger transaction, which combined media assets contributed by El Sitio, Inc., and other media assets contributed by funds affiliated with Hicks, Muse, Tate & Furst Inc. and members of the Cisneros Group of Companies. Headquartered in Buenos Aires, Argentina, and Miami Beach, Florida, Claxson has a presence in all key Ibero-American countries, including without limitation, Argentina, Chile, Brazil, Spain, Portugal and the United States. This press release contains forward-looking statements within the meaning of the "safe harbor" provisions of the U.S. Private Securities Litigation Reform Act of 1995. These statements are based on the current expectations or beliefs of Claxson's management and are subject to a number of factors and uncertainties that could cause actual results to differ materially from those described in the forward-looking statements. For a detailed discussion of these factors and other cautionary statements, please refer to Claxson's registration statement on Form 20F filed with the U.S. Securities and Exchange Commission on June 27, 2002. CONTACT: CLAXSON INTERACTIVE GROUP INC. Media: Alfredo Richard, SVP, Communications +1-305-894-3588 Investors: Ezequiel Paz, AVP, Corporate Finance +1-305-894-3574 Web site: http://www.claxson.com/ * World Bank Extends Argentina Three-Year Grace Period ------------------------------------------------------ The World Bank paid US$250 million under its guarantee of the Series D Zero Coupon Notes issued by the Republic of Argentina and due October 15, 2002. The payment marks the first time the bank ever had to subsidize bonds it guaranteed. Argentina now has 60 days to make the payment to ensure the guarantee rolls to the remaining two tranches of the $1.5 billion bond, reports Reuters. The government of Argentina had said that they would reimburse the bank within the 60-day period. If Argentina fails to pay the bank by that time, it will be given three years to gather the amount needed to pay the bank, but the World Bank would not be guaranteeing the other tranches of the bond, which has a CCC+ rating from Standard and Poor's. A ratings downgrade on the bonds would most likely follow. "Following the Republic's request to the World Bank to extend terms for reimbursement due to Argentina's financial liquidity constraints and severe social crisis, (the bank) has decided to direct that (Argentina) reimburse the World Bank in four equal semi-annual installments commencing on October 15, 2005," the bank said. The interest would be payable semi-annually at Libor (London Interbank Offered Rate) plus four percent. The Argentine economy crisis has caused a default on many of its bonds held by private investors. Argentina has been trying to reach an agreement with the International Monetary Fund. The government said that the country needs a new aid package to cover upcoming payments due to other multilateral lenders. Argentina was due to repay on Tuesday US$809 million to the bank on regular loans. However, the country has decided to utilize the 30-day grace period provided for the scheduled loans. ============= B E R M U D A ============= TYCO INTERNATIONAL: Auditor Not Included In Criminal Suit --------------------------------------------------------- A spokesman for PricewaterhouseCoopers (PwC), the auditor for Tyco International Ltd, said that the company has received an assurance that no criminal charges will be filed against them in connection with the alleged crimes commited by Tyco's former executives. David Nestor was quoted by Knight Ridder Business News saying that the company have been in contact with the Manhattan district attorney's office and have been assured that the office does not intend to seek indictment against the auditing firm. Individual auditors from PwC were subjected to interrogation following the investigation on the corporate scandal that hit Tyco. The interrogation was done to find out if the auditors should have released a proxy statement revealing that US$32 million bonus paid to Tyco's former CEO Dennis Kozlowski. Kozlowski, and Tyco's former finance chief Mark Swartz face charges of grand larceny and enterprise corruption. Both pleaded not guilty, and are out on bail. John Moscow, the lead prosecutor in the Tyco case gave Reuters confirmation that his office has no intention of pressing charges against PwC or any of their individual auditors as of the moment. Moscow added, "The investigation is ongoing." PwC is anxious to end rumors on their investigation and has fears of being dragged down by the scandals Tyco is facing. A rival auditing firm, Arthur Andersen has collapsed because of its involvement in the Enron case. The auditors faced criticism for failing to notice that Tyco had used illegal accounting practices to boost its financial picture. However, details of the deals done by Kozlowski and Swartz reveal that they tricked PwC. Tyco shares closed at $12.92 Tuesday, down 72 cents. CONTACT: Tyco International Ltd. Corporate Office The Zurich Centre, Second Floor 90 Pitts Bay Road Pembroke HM 08, Bermuda Phone: 441-292-8674 Home Page: http://www.tyco.com =========== B R A Z I L =========== BANCO ITAU: Merrill Cuts Recommendation On Election Concerns ------------------------------------------------------------ Worry about the outcome of Brazil's elections prompted Merrill Lynch to downgrade its equity recommendation on Brazilian bank Banco Itau SA to "neutral" from "buy," says Dow Jones. Brazilian shares have been punished for month by investors, who are getting jittery about the global economy and the outcome of presidential elections this October. Now voter opinion polls show that the longtime frontrunner and leftist candidate Luiz Inacio Lula da Silva is winning easily against the government-backed candidate Jose Serra. Merrill thinks Banco Itau will profit "handsomely" from its investments in the third quarter, but the Brazilian bank also holds a lot of worrisome government debt. "We cannot ignore the market's concerns of (government) debt restructuring risk, and in this alternative outcome, we believe bank shares would offer poor shelter," Merrill said in a research note. CONTACT: BANCO ITAU Rua Boa Vista, 176 01014-919 Sao Paulo, Brazil Phone: +55-11-3247-3000 Fax: +55-11-5582-1133 http://www.itau.com.br Contacts: Olavo Egydio Setubal, Chairman Roberto Egydio Setubal, President and CEO Henri Penchas, SVP Accounting & Control Area CSN: Doubts Mount Over Corus Merger ------------------------------------ The planned merger between British steel giant Corus Group Plc and Brazil's CSN may take longer than previously expected to be completed. Corus, Europe's second-largest steelmaker, which agreed in July to buy CSN, Brazil's second-largest steel maker, for US$4.2 billion in stock and assumed debt, originally anticipated that the transaction to be completed by November. However, the planned transaction is likely to be seriously delayed by the country's presidential election. The results of the vote are expected to bring the left-wing Luiz Inacio Lula da Silva to power. Lula, who won the first round of elections earlier this month and faces a second round of voting on 27 October, has already said he will replace Brazil's central bank president Arminio Fraga with someone who understands "the subtleties of hunger and poverty". He is expected to install similarly sympathetic directors at the Brazilian state development bank, BNDES. BNDES is in a powerful position to delay or block the merger, as it is CSN's main creditor, and has lent US$1 billion to CSN's parent company, the Vicunha Group. One source in Brazil said: "If Vicunha Group folds, BNDES will get control of CSN and I think they will try to sell it to another Brazilian company. CSN is Vicunha Group's main cash cow, so BNDES will take a close interest." Corus and CSN will present BNDES with a business plan at the end of this month, outlining merger benefits, but the bank is unlikely to consider the proposals until March. To see financial statements: http://bankrupt.com/misc/CSN.pdf CONTACT: Jose Marcos Treiger CSN - Investor Relations General Manager Tel. +55 21 2586 1442 Email: jmtreiger@csn.com.br URL: www.csn.com.br Isabel Viera Thomson Financial Tel. +1 (212) 701-1823 Email: isabel.vieira@tfn.com URL: www.thomsonfinancial.com ELETROPAULO METROPOLITANA: BNDES Delays $85M Payment ---------------------------------------------------- The AES Corporation (NYSE:AES) announced Tuesday that the Brazil National Bank for Economic and Social Development (BNDES) has agreed to defer until October 28, 2002 an $85 million payment due by an AES subsidiary related to the acquisition of Eletropaulo Metropolitana Electricidade de Sao Paulo S.A., the electric distribution company for Sao Paulo, Brazil. AES stated that its subsidiary is currently in discussions with BNDES to reschedule payments due by its subsidiaries in respect of Eletropaulo common and preferred shares, but there can be no assurance that an agreement will be reached. As previously reported, Eletropaulo is also in discussions with its lenders to restructure its bank loans and other financial obligations. "Safe Harbor" Statement under the Private Securities Litigation Reform Act of 1995: This news release may contain "forward- looking statements" regarding The AES Corporation's business. These statements are not historical facts, but statements that involve risks and uncertainties. Actual results could differ materially from those projected in these forward-looking statements. For a discussion of such risks and uncertainties, see "Risk Factors" in the Company's Annual Report or Form 10-K for the most recently ended fiscal year. AES is a leading global power company comprised of contract generation, competitive supply, large utilities and growth distribution businesses. The company's generating assets include interests in 176 facilities totaling over 60 gigawatts of capacity, in 33 countries. AES's electricity distribution network sells over 108,000 gigawatt hours per year to over 16 million end-use customers. For more general information visit the company's web site at www.aes.com or contact investor relations at investing@aes.com. CONTACT: The AES Corporation Kenneth R. Woodcock, 703/522-1315 ELETROPAULO METROPOLITANA: Telesp Loses Appeal ---------------------------------------------- Sao Paulo-based telco Telesp, a subsidiary of Spain's Telefonica, lost in its appeal against a lower court order that authorizes local electrical distribution company Eletropaulo Metropolitana Eletricidade to increase the fees it charges Telesp for the use of its distribution poles. According to Brazilian financial daily Gazeta Mercantil, Brazil's supreme court rejected Telesp's appeal. As a result, Telesp must now pay BRL3/month per pole (US$0.78/month), compared to the BRL0.12/pole fee charged since 1986, well before the telco was privatized. Eletropaulo, whose Sao Paulo network comprises 900,000 such poles, originally attempted to raise the fee two years ago, and threatened to ban Telesp from using them unless it paid BRL5 per pole. But the lower court set BRL3 per pole as a provisional rate while the full hike is discussed. Telesp has argued the two companies have always shared the infrastructure and that in demanding such a high fee Eletropaulo is abusing its power as the only infrastructure provider. In response to the controversy, Eletropaulo said it is merely bringing prices up to date. CONTACT: ELETROPAULO METROPOLITANA Avenida Alfredo Egidio de Souza Aranha 100-B, 13 andar 04726-270 San Paulo Brazil Phone: +55-11-548-9461, +55 11 5696 3595 Fax: +55-11-546-1933 URL: http://www.eletropaulo.com.br Contacts: Luiz D. Travesso, Chairman and President Orestes Gonzalves Jr., VP Finance/Investor Relations FIAT: Fidis Finance Division To Be Sold Soon -------------------------------------------- Italian automaker Fiat is in advanced talks to sell in the coming weeks the Brazilian arm of its Fidis consumer car finance business, according to The Financial Times. Sources familiar with the talks said that potential bidders were expected to pay around EUR100 million for Fidis' Brazilian operations. Fiat is looking to sell Fidis as part of its pledge to sell more than EUR2 billion in assets this year to raise cash, reduce debt and cover losses at its car unit. Fiat is also looking for a partner for its Brazilian financing arm. Banco Fiat SA would be attractive to any of the big Brazilian banks such as Banco Bradesco SA, Banco Itau SA or Uniao de Bancos Brasileiros SA, said Erivelto Rodrigues, director of Austin Asis, a banking consultancy in Sao Paulo. In Brazil, where Fiat is the biggest maker of passenger cars, its financing arm is the largest auto finance company and 26th biggest bank with assets of BRL4.5 billion (US$1.4 billion), according to central bank figures. ========= C H I L E ========= ENERSIS: Hiring Advisor To Plan Sales ------------------------------------- Chilean power sector holding Enersis, which is trying to embark on a divestment plan, is expected to contract a sale advisor by the end of the month to assist the Company in the transaction. Enersis S.A. recently revealed a plan to sell some of its assets to help ease debts of US$10.8 billion. That sum includes a US$1.4-billion loan payment to its parent, Spain's largest power group, Endesa. Under the plan, Enersis would sell its Rio Maipo distributor, the Manso de Velasco real estate group and its 60% stake in the Infraestructura 2000 group. Informal meetings have already been held with potential buyers of Rio Maipo. Enersis has also met with Chile's private pension funds (AFPs) to discuss a capital increase of up to US$1.5 billion. To see financial statements: http://bankrupt.com/misc/Enersis.pdf CONTACT: ENERSIS Investor Relations: Ricardo Alvial Chief Investments & Risks Officer of Enersis Email: ram@e.enersis.cl Phone: (562) 353-4682 Susana Rey, srm@e.enersis.cl Ximena Rivas, mxra@e.enersis.cl Pablo Lanyi-Grunfeldt, pll@e.enersis.cl MADECO: Equity Issue Fails, Outlook Worsens ------------------------------------------- The future of Chilean copper wire and cable manufacturer Madeco is getting bleaker after its US$90-million equity issue attempt collapsed on Tuesday, relates Business News Americas. The underwriter for the issue, Banco de Chile, is expected to return those shares signed up for under the first stage of the process, the main subscriber being Madeco's controlling group, Quinenco. Quinenco agreed to acquire nearly all the roughly CLP37 billion (about US$50mn) worth of shares taken up in the first stage of the issue, which ended September 23 and which had a money-back guarantee if a minimum of CLP47 billion was not raised by the end of the process on Tuesday. By the end of the pre-emptive rights period, which closed October 8, the equity issue had raised just CLP38 billion (roughly US$51mn) and it appears that few, if any shares were signed up to in the voluntary subscription period which followed. Now pension fund bondholders are said to be demanding a more drastic restructuring than previous management had planned. Beyond cables, Madeco makes finished and semi-finished non- ferrous products based on copper, aluminum, related alloys and optical fiber as well as flexible packaging products for use in the mass consumer market for food, snacks and cosmetics products. Chile's Luksic family holds 56.5% of Madeco through Quinenco and its subsidiaries. To see latest financial statements: http://bankrupt.com/misc/Madeco.doc CONTACT: MADECO S.A. Ureta Cox, 930 San Miguel, Santiago, Chile Phone: 56-2 5201461 Fax: 56-2 5516413 E-mail: mfl@madeco.cl Home Page: http://www.madeco.cl Contacts: Oscar Ruiz-Tagle Humeres, Chairman Albert Cussen Mackenna, Chief Executive Officer Investor Relations Phone: 56-2 5201380 Fax: 56-2 5201545 E-mail: ir@madeco.cl RESTRUCTURING ADVISER: SALOMON SMITH BARNEY HOLDINGS INC. 388 Greenwich St. New York, NY 10013 Phone: 212-816-6000 Fax: 212-793-9086 Home Page: http://www.smithbarney.com Contact: Michael A. Carpenter, Chairman and CEO Michael J. Day, EVP and Controller =============== C O L O M B I A =============== CMS ENERGY: Sells Colombian Drilling Rights To Cepsa ---------------------------------------------------- CMS Energy recently sold its rights to drill in Colombia in order to raise cash and cut debt. According to Bloomberg, CMS's drilling rights in the Valle Medio del Magdalena area, 100 kilometers (62 miles) south of Bogota was sold to Compania Espanola de Petroleos SA (Cepsa), Spain's second-biggest oil company. Cepsa, says that the three adjacent blocks, known as Torbellino, Abanico, and Espinal, may have reserves of 90 million barrels of crude. An agreement between Cepsa and the Colombian government provides that Cepsa will drill a minimum of four wells and carry out a 3D seismic survey within the next three years, reports Business News Americas. A spokesman for Cepsa, who would not reveal the purchase price, says that the acquisition is another step forward in the company's strategy of strengthening its upstream activity. Cepsa's share of the blocks' current output is about 1,700 barrels of oil equivalent per day. CONTACT: CMS Energy Suite 1100, Fairlane Plaza South 330 Town Center Drive Dearborn MICHIGAN United States 48126 Tel +1 313 436-9200 Homepage: http://www.cmsenergy.com Contacts: Kenneth Whipple - Chairman & Chief Executive David W. Joos - President & Chief Operating Officer =========== M E X I C O =========== AEROMEXICO: Hospital Consortium Confirms Purchase Interest ---------------------------------------------------------- Olegario Vazquez, chairman of Mexico's Grupo Empresarial Angeles, confirmed that hospital consortium's interest in buying Aeromexico, relates EFE. "Grupo Angeles has more interest in Aeromexico than in Mexicana. When the tender opens, we'll be very interested because we may be one of the strongest potential buyers," Vazquez said. Aeromexico and Mexicana de Aviacion are Mexico's two largest airlines. Both have been operated by Cintra, a government- controlled holding company, since 1995 when the government seized the companies during an economic crisis. Two years ago, federal antitrust regulators ruled that Aeromexico and Mexicana de Aviacion should be split up and sold off separately because they controlled 80% of the national airline market. Vazquez said that, although Grupo Angeles was seeking to acquire Aeromexico, the consortium would not participate "blindly" in the bidding process. He said he had no problem with Cintra being sold to foreign investors, although he added that "Mexican investors are interested." Grupo Empresarial Angeles owns the Angeles chain of private hospitals, 17 Mexican hotels and a stake in Grupo Aeroportuario del Pacifico. CONTACT: AEROMEXICO Mayte Sera Weitzman of AeroMexico, +1-713-744-8446, or mweitzman@aeromexico.com CONTACT: MEXICANA DE AVIACION Adolfo Crespo, V.P. of Public Affairs Division of Mexicana Airlines, +1-210-491-9764 ================================= T R I N I D A D & T O B A G O ================================= BWIA: Restructuring Proposal Presented to Staff ----------------------------------------------- BWIA West Indies Airways Ltd. announced its restructuring plans on October 7. The plan includes rationalizing the airline's fleet, drafting new rules and other cost cutting measures. The airline is trying to save US$1 million per month in operational costs for the following months. The plan would enable the BWIA to operate at lower costs, while getting relatively higher profits. The airline's President and Chief Executive Officer Conrad Aleong presented the outline to the staff, complete with details as to how other profitable low-cost airlines have conducted their business. The Barbados Advocate reports that Aleong reminded the employees that the airline can be profitable without giving up the schedule, safety or warm service that makes it special and has won BWIA, for the third year in a row, "The Best Airline to the Caribbean Award". Most of BWIA's employees have offered favorable reactions to the plan. In fact, they have offered the Company's executives their suggestions on cost cutting. CONTACTS: BWIA West Indies Airways Phone: + 868 627 2942 E-mail: mailto:mail@bwee.com Home Page: http://www.bwee.com/ Contacts: Conrad Aleong, President and CEO (Trinidad) Beatrix Carrington, VP Marketing and Sales (Barbados) Paul Schutz, Chief Financial Officer (Trinidad) ============= U R U G U A Y ============= GALICIA URUGUAY: Restarting Operations After Intervention --------------------------------------------------------- Banco Galicia Uruguay SA, a subsidiary of Argentina's Banco de Galicia y Buenos Aires SA and whose operations were suspended eight months ago amid the country's worsening financial crisis, will reopen soon. A Dow Jones Newswires report cites an unnamed company source saying that officials from Uruguay's Central Bank said that if BGU asked permission to reopen, they would have no problem accepting it. The bank has not yet filed a formal request to reopen but will do so "within two weeks" - as soon as some legal loose ends are tied up - the official said. BGU was intervened by the Central Bank and had its operations subsequently suspended after losing some US$500 million between December 2001 and January 2002. BGU had about US$1 billion of deposits, US$1.67 billion in assets and US$231 million in shareholders equity as of Dec. 31. It has some 13,000 clients, most of them Argentines. Galicia's rescheduling proposal has been accepted by clients, whose savings represent 80% of that amount, the source said. The proposal commits the bank to returning the deposits within nine years, with 3% of deposits returned to clients who signed up to the deal as soon as Galicia's doors reopen. The rest will come in annual payments, with 15% of deposits returned in the first two years and 10% thereafter. Citing a company press release, Dow Jones reports that, when the proposal is approved, clients will receive a 2% fixed annual interest rate on balances. CONTACT: BANCO DE GALICIA Y BUENOS AIRES S.A., HEAD OFFICE Tte. Gral Juan D. Peron 407 1038 Buenos Aires, Argentina Phone: +54-11-6329-0000 Fax: +54-11-6329-6100 Home Page: http://www.bancogalicia.com.ar BANCO GALICIA URUGUAY S.A. World Trade Center Luis A. Herrera 1248 Piso 22 Montevideo Uruguay Tel.:(+598-2) 628-1230 www.bancogalicia.com.uy *********** S U B S C R I P T I O N I N F O R M A T I O N Troubled Company Reporter Latin American is a daily newsletter co-published by Bankruptcy Creditors' Service, Inc., Trenton, NJ, and Beard Group, Inc., Washington, DC. John D. Resnick, Edem Psamathe P. Alfeche and Ma. Cristina Canson, Editors. Copyright 2002. All rights reserved. ISSN 1529-2746. This material is copyrighted and any commercial use, resale or publication in any form (including e-mail forwarding, electronic re-mailing and photocopying) is strictly prohibited without prior written permission of the publishers. Information contained herein is obtained from sources believed to be reliable, but is not guaranteed. The TCR Latin America subscription rate is $575 per half-year, delivered via e-mail. Additional e-mail subscriptions for members of the same firm for the term of the initial subscription or balance thereof are $25 each. For subscription information, contact Christopher Beard at 240/629-3300. * * * End of Transmission * * *